David Rosenberg: Two big problems with the 'pent-up demand' everybody is counting on

The candidates for “pent-up demand release” come to the grand total of 8.5 per cent of total consumer spending. PHOTO BY REUTERS/CHRIS HELGREN

 

Here’s why the boost could be disappointing

You can’t go anywhere these days and not hear about the pent-up demand «V-shaped» recovery that awaits us once we all get vaccinated . The really big spending items in the services area are rents, utilities and health care, which make up nearly 40 per cent of the aggregate spending pie, and outlays here are actually up fractionally over the past year. No doubt, the plunge in cyclical services came to a larger US$325 billion. But that gap is $145 billion, or less than one per cent of consumer spending.

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Source: David Rosenberg | Financial Post